AESE shelves Bally’s bid for revised Element Partners WPT proposal

Allied Esports Entertainment has entered into a revised stock purchase agreement with Element Partners to sell all of the outstanding capital stock of each of the legal entities that collectively operate or engage in its poker-related business and assets.

The transaction, which includes the World Poker Tour, comes after AESE had ditched Element’s previous up to $78.25m offer in favour of a $90m proposal that was tabled by Bally’s Corporation.

However the revised agreement, which is expected to close in April 2021, increases the overall purchase price from $68.25m at closing and $10m guaranteed revenue share payments paid over three years after closing, to $90.5m which is all payable at closing.

Further increases include a raise in the initial deposit of the purchase price from $4m to $10m, and heightened termination fee payable to Element if AESE accepts a competing acquisition proposal, or consummates an acquisition proposal within 12 months after termination of the revised stock purchase agreement, from $3m to $3.45m.

Furthermore, an extension has also been added to the date on which AESE and its subsidiary, Allied Esports Media, or Element may terminate the revised stock purchase agreement if any conditions to the closing have not been satisfied, from March 31, 2021 to September 30, 2021.

Finally, an increase to Element’s non-performance fee has also been detailed from $3m to $10m, which eliminates the ability of the firm to terminate the revised stock purchase agreement prior to the outside date by paying the non-performance fee.

Detailing the revised agreement, AESE stated that its “board of directors unanimously approved the revised stock purchase agreement. In connection with approval of the revised stock purchase agreement, the company’s board of directors, in consultation with its financial and legal advisors, compared the terms of the revised stock purchase agreement to the terms of the proposal received from Bally’s Corporation to acquire the WPT Business for $90m. 

“After such review, the board of directors determined that the Bally’s proposal did not constitute a ‘superior Proposal’ (as such term was defined in the stock purchase agreement with Element)”.

The transaction is expected to close in late April 2021, assuming the company’s shareholders approve the transaction and following required regulatory approvals and other customary closing conditions.